Let’s consider a company again, for any type of industry. But let’s imagine that it has a centre, for example a headquarters based in a specified location, and some “peripheries”, which are delocalised factories, area offices and commercial entities here and there. This is a typical configuration, I’d say a basic one, not a large conglomerate with different businesses or a holding with sub-holdings and a number of companies in disparate parts of the world.

Now, one of the main problems is that of identification and loyalty of the peripheries. How can a decentralised structure identify with the guiding beliefs, the strategy and even the philosophy of the centre, which is materially far away in space and time, and how can it preserve its loyalty to a distant power over time, after one year or, let’s say, after three years?

It is enough to open a new office, maybe in the same city – I’m thinking of a professional agency, for example – and inevitably, the two entities will have a different atmosphere. Each one of them, according to its peculiar location, the quality and features of its management, people, customers, etc., will soon wear its own uniform, it is true. If the system is left by itself, in a short time it will be ready to break. Several spin-offs have been born in this way. A specific part doesn’t identify itself as a piece of the whole any longer, and start thinking in a different, divergent way. It is natural, and also often vital, fruitful.

Let me open a parenthesis here just to show you the power of the previous concepts. You may know that a psychological and anthropological test consists of establishing a team for a particular task. For example, imagine training twenty people (who don’t know each other before the test, and are men and women) to grow vegetables in a garden. The first phase of the test is to train the entire group of people, in the same way. Just before starting the second operative phase, the work on the garden, the team is randomly divided into two groups. The first group must wear a red shirt, and the second a white shirt. No other instruction or goal is given, nothing else. Well, now a strange thing happens. Not only will each single individual tend to identify with the group with the same colour of shirt, but a tangible competition starts between the two groups as if, magically, the different uniforms require their own behaviour, different from the other party, and this behaviour must prevail. I don’t want to dwell on the results of this well-known experiment if not to underline the strength of identification, in a good and in a bad way.

In fact, changing the scenario, when a big company with a strong philosophy and policies needs something different, for example a spark of creativity off the rules or a new line of completely innovative products, it will not get this from inside itself and it will be forced to create a de-glomerate, a desired and controlled spin-off, for example a detached research company, because only outside its rigid fences and policies it is possible to grow a divergent idea – or it is obliged to buy a divergent idea, of course.

So, returning to our initial argument, what is the trick to create a strong and lasting good relationship between the centre and its peripheries? Many things can help: periodical training and education, reciprocal visits, a pervasive system of planning and control, common and strict projects off the routine with joint task forces, the creation of an often false need of urgency (how many “crash programmes” have we experienced in our managerial life?), a systematic reorganisation of the structure (in the HR language, it is called “reshuffling”), etc. The imagination of the centre in inventing new tricks is endless, because, eventually, all these tricks are not enough. The only and real thing that matters and works to guaranty identification and loyalty of the peripheries over time is only one: added value.

If you live and work in periphery, as time goes on, the only thing that you recognise is the added value – to your work, to your life – that the centre is able to provide. So, if the centre is able to pump added value to the peripheries, the system holds together and positively grows. When the centre stops pumping added value, a slow but inevitable decline of the system starts. The peripheries fall in a crisis of identity, you see the first cracks, and start listening to the local mermaids… In the sky, far from the horizon of the centre, new constellations appear, more and more clearly. That’s all.

Yeah, but what is this added value, eventually, on the English-speaking street? We have to refer to Maslow’s theory to understand. Abraham Maslow (1908-1970) in his A Theory of Human Motivation, designed a hierarchy of human needs as a pyramid.

Maslow’s hierarchy of needs – Wikipedia

The fundamental level of need is the largest one, the base. Here we can see the Physiological needs. Then, climbing the pyramid, we find the Safety level, then the Love/belonging level, the Esteem level and on the top, finally, the Self-actualization level of needs.

The first one, as the name says, comprises the metabolic requirements for survival: air, water, food, but also shelter (house), clothing, etc. Safety and Security needs encompass personal security, financial security, health and well-being, a safety net against the possible impacts of the future, etc. The third level concerns friendship, intimacy, family in a broader sense, and the feeling of belongingness. The next level is based on the need all humans have to be and feel respected. The final one is described by Maslow as “the desire to accomplish everything that one can, to become the most that one can be.”

Now, since companies are made with people, it is easy to understand what a person needs from the centre, forgetting their physiological needs, which are taken for granted: safety and security, belongingness and friendship, esteem and respect, and a path for the personal improvement. Is my centre able to pump, to transmit these things, this added value to me, when I am far away and detached? Is my centre convincing, and not in terms of slogans, of sermons, but in terms of actions, of the consequentiality of its actions?

If you reflect, there is a capsizing of the usual perspective: in this vision (believe me, it is the right one), it is up to centre to respect its pact first. The centre must respect and consolidate The Pact with its peripheries. So it means brand and image (safety and security), strategy, marketing and right investments (safety and security again), but also the systematic transmission of esteem, respect and transparency (belongingness) and eventually a clear hope for the future.

The systems break because the people break. If the transmission stops, immediately social anxiety grows. A lack of esteem brings a sense of personal ostracism, shunning, abandonment, etc. Then we will see depression or anger, or desire of revenge. The spin-off, personal or corporate, is around the corner; it is only a matter of time. And in the meantime, when the transmission stops, the performance of the peripheries declines despite all the tricks and the calls like “let’s roll up our sleeves, folks!”, which soon become counterproductive.

By the way, there are two clear signals, two symptoms of the crisis in the system between the centre and the periphery. The first is valid for big companies: you suddenly see the growing activity of HR, which goes into the field harshly. Be wary, nunc and semper, of HR. The second, valid for small companies, consists of an increase in the high declarations of the boss: slogans, utopias and calls and, at the same time, a great evasiveness and evanescence. Pay attention then.

I know there is a third possibility, the progressive abandonment of the useless periphery without a word, in silence, but this is typically Italian, and it isn’t worth of discussion.

These concepts for the dialectics between the centre and its peripheries are not only valid for companies, but also for states. The state is the centre, of course, and especially in a crisis it needs that the peripheries, the different regions, identify themselves with the central guiding beliefs and strategies and, of course, remain loyal. Because an economical crisis is an ugly beast, especially when it occurs together with a moral and ethical crisis, which is more dangerous indeed for the survival of the whole.

However, Luca Ricolfi, a journalist for Il Sole 24 Ore, the most prestigious economics newspaper in Italy, in his article “Mezzogiorno, è sempre colpa degli altri?”, 9 August 2015, deals with the problems of the relationship between the centre and the peripheries (in this case, the South of Italy, il Mezzogiorno d’Italia), ignoring both the simple rule of the added value and Porter’s lessons. You can find his exemplary article here:

In short, he contested (actually, in a strange way) the figures that tend to demonstrate that the growth of the South of Italy from 2000 to today was less than of Greece, and he espouses Matteo Renzi’s thesis that in the South of Italy there is the cultura del piagnisteo, the culture of whining and complaining, and so it is time to change starting from that, abandoning this culture, since il Mezzogiorno is guilty neither more nor less than the Italian State.

I agree with the statement that the South of Italy is guilty neither more nor less than the Italian State. And also with the statement that the North of Italy is guilty neither more nor less than the Italian State. And Sardinia too is guilty neither more nor less than the Italian State. Yes, we are all guilty. We vote (sometimes; now less than in the past – this is the third government not elected by the citizens, it is important to remember it), and, yes, we voted for this class of inadequate and mostly corrupt politicians, who are steering our nation towards the abyss, at least morally and ethically. And, in fact, Ricolfi recalls that not only was the growth in the South of Italy less that of Greece, but also that the whole of Italy from 2000 to today performed less well than Greece! Alleluia! This is great news, very positive. It is true that the South performed worse than the North, okay, but why do those terroni dare complain? We all performed below the level of Greece, so what? Alleluia, brava gente! So, the problem, according to Ricolfi and Matteo Renzi, is that cultura del piagnisteo. And, just not to leave any doubt about his being an embedded journalist, Ricolfi concludes his article in this way:

The rules and the dialectics are clear: there is a great, growing crisis between the centre and the peripheries, especially the South of Italy. Matteo Renzi plays the boss, and Luca Ricolfi the HR man. After all the slogans, the declarations, the bright visions based on nothing from the boss, his calls (“let’s roll up our sleeves, folks!”), evasive as ever, now it is time to reshuffle, and the first idea of the HR man is to divide – divide et impera, according to the historical tradition.

So, please, forget the widespread corruption (just yesterday there was news that also the unions are corrupt – really?), the share of the power among the components of the economic lobby, the most greedy system of spoils, the dramatic social crisis, the dominant organised crime, the disappearance of our industrial fabric, etc. etc., now the first goal is to divide Italians between terroni e polentoni, as at the beginning of the twentieth century! I don’t want to dwell on this old dialectics, please. We are all guilty, surely, especially because we don’t rebel, but the Italian state has incredible responsibilities that now the boss and his HR men want to hide, pulling us to a fratricidal fight again.

What is the added value that the Italian State transmitted and is transmitting today to the Italian regions and citizens (and I’m thinking first of my land, Sardinia)?

What is The Pact between the Italian State and its citizens?

Do we have safety and security, belongingness and friendship, esteem and respect, and a path for personal improvement?

Actually, the Italian State is threatening not only the upper levels of our needs, but also our basic and physiological needs: water, bread, food, housing, etc. About 10 million people are in a state of absolute poverty (in Italy!), and other 20 million are suffering dramatically. Youth unemployment is about 50%. Why? Only for the cultura del piagnisteo of the South or because an entire political class (yes, I know, which we voted for, in the North, South, East and West of Italy) spoiled and stripped our country?

Michael E. Porter wrote that only business can create wealth, and that nations compete to offer the most productive environment for business. What determines competitiveness? Macroeconomic policies (fiscal policy, government debt, monetary policy, etc.), human development and political institutions (basic education, health, political freedom, voice and accountability, political stability, government effectiveness, security, civil rights, judicial independence, freedom for corruption, etc. = quality of the NBE or National Business Environment), endowments. Endowments create a foundation for prosperity, but true prosperity is created by productivity in the use of endowments.

Now, returning back to the concept of the added value that the centre (the Italian State) must provide to the peripheries (the different parts of Italy) to ensure the quality of the NBE and thus the wealth of its 60 million inhabitants, would you judge these single elements that characterise our life, please?

Fiscal policy;

Government debt;

Education;

Political freedom;

Voice and accountability;

Political stability;

Government effectiveness;

Security;

Civil rights;

Judicial independence;

Freedom from corruption.

I don’t want to conclude my article saying that corruption inevitably brings intellectual prostitution (Ricolfi’s article is nothing but a marchetta, a quickie), but I invite my readers to separate the wheat from the chaff and to understand the context, the scene, the actors and the storytellers, always.

2 Comments

Giorgia

Dear Ciriaco, I liked your article very much. It is so dramatically true!
A very bitter portrait of our POOR Italy and yes, as a “meridional” woman (or at least this is like I feel in my hearth), I am making the PIAGNISTEO!
As a matter of fact I WOULD BE READY TO GO FOR A REVOLUTION, but the revolution is meant to be done by more than just a couple of persons…Moreover, I can see that Italian people have luckily?, unluckily?….not yet reached the bottom…Or, better said, the ones who still haven’t, I mean the ones who still have enough to eat, have (see?) no reason to revolt; the other ones, the poor ones, the real poor ones!, have very few energies left , surely not enough to go through the barricades…
Not to forget: for any revolution a Visionary, a big Leader is requested. We need someone whom we may trust in…someone who acts setting a “good example”…someone who NOW accomplishes what he promised from the very beginning…and exactly as he promised to do that…
According to my humble and very personal opinion, only such a person could nowadays “re-feed” the empty souls of the (still?) wealthy people; only such a person could, nowadays, set the hearts of the poor people alight. I see a light, I want to believe that what I see is THE Visionary’s light able to lead a real revolution, able therefore of encouraging, supporting and motivating in order to change, to reconstitute, to clean, to improve the current situation of our Italy.
Ethic, Respect, Loyalty, Justice, Security, Honor… words never being so flimsy and empty like nowadays…finally regaining their full meaning, value and place in our society? Yes! But only if we recognize, accept, let operate, follow and actively help the Good Example…

Ciriaco Offeddu

August 20, 2015 - 2:11 am

Thank you, Giorgia! You are dramatically right indeed, there is no other hope – if hope still exists. We didn’t learn how to kill our father (historically speaking) as the French nation did. We only learnt how to survive different colonisations, by floating and opportunistically behaving. And now here is again another colonisation, nothing else, and dramatic spoils again. Our houses, our cars, and our families are only ATM machines to feed a greedy state, which is growing day by day, starving and killing its populace. This is the true situation.

CIRIACO OFFEDDU
Engineer, CEO of several companies, more than twenty years of experience as a leader of a consulting group specialized in direct management in a broad range of business disciplines and industries, expert in internationalization processes.

Newly Graduated from the City University of Hong Kong with a Master in Creative Writing.